Upcoming stock markets: can stock market dynamics continue in 2022?
Wall Street certainly thinks so.
Jonathan Golub, chief US equities strategist at Credit Suisse, predicts the S&P 500 will hit 5,200, or about 9% above its 2021 level. That would mark a healthy gain, though it is pale relative to the 27% increase in the index compared to the last 12 months.
Leading the call: Golub said he is increasingly bullish because of “strong projections for economic growth” – and because he expects companies to hand out more money for buyouts actions, a move that drives up stock prices.
He also said Credit Suisse is no longer betting that corporate taxes will rise to pay for new government spending. This allowed the bank to increase its corporate profit forecast over the next two years.
The big question mark is rising interest rates. Near-zero rates have been the driving force behind the stock market rebound since its initial Covid-induced crash, providing businesses with easy access to cash and boosting overall confidence.
The Federal Reserve has indicated it could hike rates three times in 2022 as it tries to contain inflation.
If this happens, borrowing costs will still be extremely low by historical standards. But an environment of rising interest rates could change the mood.
“Risks are mounting as central banks move closer to ending their emergency monetary support,” Goldman Sachs analysts said in the bank’s 2022 forecast for equities.
But strategists said the market recovery is expected to continue thanks to an expected 8% increase in profits for global companies.
âThis should support a reasonably strong year for the stock markets as a whole, contributing to another year for the new bull market, albeit at a slower pace,â they said.
My thought bubble: The forecast for the coming year is best viewed as a snapshot in time. Wall Street market estimates for 2020 were quickly dismissed as the pandemic gained momentum. In early 2021, few policymakers expected inflation to rise so sharply.
Omicron scrambles the big consumer tech conference
CES, one of the tech industry’s premier trade shows, continues despite an unprecedented spike in Covid-19 cases fueled by the rapidly growing Omicron variant.
The event will return to Las Vegas this week for the first time since 2020. At last count, over 2,000 exhibitors had pledged to show up, although there have been a number of high-profile cancellations in recent years. weeks.
The president of the Consumer Technology Association, which hosts CES, said on LinkedIn that the conference “will and must continue.”
“There will be a lot more small companies than big ones. There may be big gaps in the salon. It will definitely be different from previous years,” Gary Shapiro wrote. “It can be messy. But innovation is messy.”
On the radar: Other major event planners have taken a different path. The World Economic Forum in Davos, Switzerland, which was scheduled to be held in person in January, has been postponed until early summer.
“The current conditions of the pandemic make it extremely difficult to hold an in-person global meeting,” organizers said in late December. “Despite the meeting’s strict health protocols, Omicron’s transmissibility and its impact on travel and mobility made a postponement necessary.”
Tuesday: OPEC meeting; ISM manufacturing index; Data on job vacancies in the United States
Wednesday: CES begins
Friday: US Employment Report for December; European inflation